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Berkshire Prediction: General Electric Is on Buffett's Mind

If Berkshire Hathaway's May 3 annual shareholder meeting means it is open season to speculate on potential changes or investment ideas at the Warren Buffett-run conglomerate, then I believe it's time to talk about General Electric.

NEW YORK (TheStreet) -- If Berkshire Hathaway's (BRK.A) May 3 annual shareholder meeting means it is open season to speculate on potential changes or investment ideas at the Warren Buffett-run conglomerate, then I believe it's time to talk about General Electric (GE).

GE may be in the process of transforming to the type of business Buffett would feel comfortable adding to his portfolio of large investments, which include IBM (IBM), Coca-Cola (KO), American Express (AXP) and Wells Fargo (WFC). At the very least, it's worth asking Buffett at Saturday's shareholder meeting whether his views on GE have changed recently.

Berkshire made a critical investment in GE's preferred shares as the industrial and financial services giant sought capital during the financial crisis of 2008. While GE has since redeemed that multi-billion dollar preferred stake, Berkshire recently disclosed a 10.6 million stake in GE common stock, a legacy of stock warrants Berkshire negotiated in the 2008 preferred deal.

Maybe, Buffett and Berkshire would now consider a new or larger round of investment.

General Electric and its CEO Jeffrey Immelt are in the process of pressing a $17 billion bid for French conglomerate Alstom's thermal, renewable and grid businesses.

Immelt's move, GE's most aggressive since the financial crisis, may be the kind of deal Buffett admires. At once, GE's play for Alstom appears slightly opportunistic, has a high strategic focus, and increases the company's exposure to industries and markets that may be in the throes of a cyclical upturn. There are two simple ways of looking at GE's deal: